1 PerspectiveSeptember 19, 2008

One Use for an Unnecessary Confidentiality Clause

We all know that confidentiality clauses keep information private, but is there a reason to insist on one if you don’t care who discovers the information you are trying to protect?  Would there ever be a reason to protect the price you paid for your house with a confidentiality clause?  Sure there is – just ask my real estate agent.

Is there a Reason to Keep the Purchase Price of Your House Confidential?

I have had the pleasure of buying a few houses over the years, and each negotiation has had its own story.  I’ll start by saying that I have never bought a house for an amount I care to keep confidential, but that’s beside the point.

I bought one house from an accomplished business executive who unquestionably taught me a few lessons along the way.  My seller was convinced that I really wanted his house, and he was right.  He knew that my wife and I had looked at his house five times (a mistake in itself), he knew that we had already sold the house we were living in, and he knew that we could afford the house he was selling.

As the negotiation process unfolded I saw the purchase price moving toward a number I wouldn’t like.  I needed a way to communicate with my next offer that my seller really had reached the outer edges of what I would pay, and I didn’t think that words alone would do the trick.  I achieved this by putting more money on the table, while pairing my offer with a requirement that the purchase price be kept strictly confidential.  This additional request was designed to signal that I was embarrassed about the terms my seller had pushed me to – and that a higher offer was unlikely.  Admittedly the addition of this new clause to the mix would give my seller something to brag about, but as long as it wasn’t a higher purchase price I knew I’d be happy.

The Epilogue

I suppose I can’t reveal which house I’m talking about since I shouldn’t breach that agreement even now, but I will say that I enjoy – or enjoyed – living in the home that I bought with that counteroffer.

Categories: Negotiation,Tactics

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